Legislation Passes Senate with Strong Support

The Senate Commerce and Labor Committee passed SB 1222 on Tuesday on an eight to zero vote. The legislation, sponsored by Sen. Bo Watson, seeks to end a decade of legislative disputes about the cost cable companies pay to attach to poles owned by electric utilities.

“We are pleased that the Committee understood the facts of this debate,” says David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association.

“Electric cooperatives have offered a good-faith compromise that allows for a clear path for resolution when pole attachment rates are disputed and, at the same time, recognizes the actual cost differences between electric utilities. We believe the legislation is an equitable path forward for electric cooperatives, utilities and the cable companies.”

Discussion on the companion bill in the House continues.

The Tennessee Electric Cooperative Association is a trade association representing the interests of Tennessee’s 23 rural and suburban, not-for-profit electric distribution cooperatives and the 1.1 million members they serve.

Video of today’s committee meetings

[button link=”http://tnga.granicus.com/MediaPlayer.php?view_id=252&clip_id=7295&meta_id=”]View Senate Committee →[/button]

 

[button link=”http://tnga.granicus.com/MediaPlayer.php?view_id=207&clip_id=7296″]View House Committee →[/button]

 

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Electric utility bill protects ratepayers

Existing law is sufficient for broadband expansion, leader says

NASHVILLE – Legislation backed by the cable television industry and their lobbyists amounts to a $13 million subsidy that will ultimately end up on the electric bills of hundreds of thousands of Tennesseans, a state utility leader said today.

“The cable companies want, in essence, a $13 million subsidy that is paid to them by the electric ratepayers of Tennessee,” said David Callis, executive vice president and general manager of Tennessee Electric Cooperative Association.

At issue is the cost cable companies pay electric utilities to attach cable wires to power poles. This “pole attachment rate” is a negotiated contract between electric cooperative and municipal power provides and the cable companies. In Tennessee, the average pole attachment rate is $14 a pole per year for rural electric cooperatives and $18 per pole per year for municipal utilities.

Pole attachment rates cover the cost of installing and maintaining a power pole.

Electric cooperatives and municipal utilities are instead supporting a compromise bill that would preserve their right to negotiate agreements and would maintain local control of these important decisions.

“We think this compromise is fair. Most important, it protects the electric ratepayers of Tennessee from a hidden subsidy of the cable industry,” Callis said. “Our legislation continues the long tradition of local control and it offers a clearly defined dispute resolution process.”

The compromise legislation, Senate Bill 1222 and House Bill 1111, is sponsored by state Sen. Bo Watson and Rep. Jimmy Matlock.

Cable companies are pushing hard for legislation that would remove the authority of each utility’s local board of directors to set the rate, placing it instead in the hands of the state government. Additionally, the cable-backed legislation would require the state to consider an artificially low rate of $7 that was originally set by the Federal government 35 years ago as a subsidy to the then-fledgling cable industry.

“It is hard to argue that a media giant like Comcast, which has spent over $30 billion in the past few years to acquire NBC, is still a mom and pop business worthy of government protection,” said Callis.

“Cable lobbyists are using automated phone calls to claim that this compromise would stop people in rural areas from getting service, which may be one of the more disingenuous smokescreens I have seen in my career,” said Callis. “Since 2008, the law says a cable company can get 50% off their pole attachment rate if they provide service to an unserved area.  We are still waiting on the first request.”

The Tennessee Electric Cooperative Association is a trade association representing the interests of Tennessee’s 23 rural and suburban, not-for-profit electric distribution cooperatives and the 1.1 million members they serve.

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Important Work

by David Callis, Executive Vice President and General Manager for the Tennessee Electric Cooperative Association

My good friend Kent Lopez is manager of the Washington Rural Electric Cooperative Association, serving in a position similar to mine. Kent is a transplanted Tennessean, and he recently shared the following about his work:

“My alarm goes off an hour earlier this time of the year. The State Legislature is in session. So I spend some extra time every morning getting ready for the day because there are special people relying on me. There is the rancher in Nespelem, the motel owner in Winthrop, the wheat farmer in Ritzville, the school teacher in Colfax … Each one has joined his or her neighbors to own and run their own local electric utility. They do this because they believe it’s in the best interest of their community. They do it without making a profit so their community will profit. They do this because they believe that the decisions that affect their community should be made locally, by individuals like themselves and their neighbors. Like I said, they are very special people. That’s why my alarm goes off an hour earlier this time of the year. I’ve got very important work to do.”

I’ll readily confess that I don’t begin my day like Kent. But my efforts, and the work of our entire staff at the Tennessee Electric Cooperative Association and The Tennessee Magazine, are no less focused on supporting our cooperative members across our state. Our government affairs staff has worked nonstop over the past several weeks as our own legislative session began. Other staff have been busy communicating with our members across the state, planning for a busy year of cooperative education and training.

Andrew Carnegie envisioned his Carnegie Corporation as a foundation dedicated to the goal of doing “real and permanent good in this world.”

That describes perfectly the work of Tennessee’s electric cooperatives. Too often, Wall Street gauges success from one quarter to the next, cutting expenses and making rash decisions that undermine long-term growth, all in an effort to drive up stock prices quickly.

We measure success on Main Street over a much longer period — at least a generation or two.

Our co-ops are run by our members — which is a difficult concept for some to accept. How does that work exactly? A governing board is elected to set policy for the co-op. That board is composed of local co-op members who volunteer to serve.

That’s the purest, most direct form of local control — local people making decisions that are in the best interest of the community. And they’re decisions that bring about “real good” for today and “permanent good” for tomorrow.

So, for the banker in Bumpus Mills, the accountant in Sparta, the farmer in Hillsboro, the insurance adjuster in Ramer, the dentist in Hohenwald, the vineyard owner in Jamestown and the retired U.S. Army lieutenant colonel in Jefferson City, we recognize the effort you put in serving your community. It’s not done for recognition or prestige; it’s done because you’re committed to making your community a better place.

People rely on you. The work you do on behalf of the co-op members in your community is important. It’s important to the members of your cooperative, and it’s important to us at TECA.

We keep that in mind every day, whether it’s publishing The Tennessee Magazine, educating tomorrow’s leaders through our youth programs, training workers on electrical safety or protecting your interests in the legislature.
It’s very important work.

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Power’s Price Tag

Mike Knotts, director of government affairs

When you go to the store to buy something, you usually take a look at the price tag before you decide to purchase it, don’t you? Few of us can just buy what we want no matter the cost, so we have to consider price along with the other factors to help us decide whether to buy a product.

Usually that price is clearly displayed for us to see. At the gas pump, the price towers in foot-tall numbers out by the street to make sure we don’t miss it. At the grocery store, there are price labels all over the place — not to mention all the “buy-one, get-one-free” and “10-for-a-dollar” promotions that are intended to make us think about the value of a particular product at a particular price. And with most things we buy, we provide some sort of compensation before we actually receive the product.

So it is very interesting to me that there is a product most of us buy of which we likely don’t know the price, don’t know how much we are buying and don’t pay for it until 30 to 45 days after we use it. It’s a product you are probably using as you read this page. And it’s a product that, in today’s society, we can’t really live without.

Electricity is probably one of the least understood consumer products on the planet. For most of us, we just know to plug our appliances into the outlet in the wall and they will work. Then, once a month, we get a bill and have to pay whatever the total says we owe. Sometimes we are relieved that the bill is low, and other times we groan when the numbers are high.

There are lots of reasons why electricity is billed this way, but there is one distinction that differentiates the most common energy source in the world from other fuels you may buy. You see, electricity has to be produced (generated is the more technical term) at the exact instant you consume it. This one fact is the primary reason why the electric power industry is so complex and why our ability to provide reliable power is such an achievement.

When you flip the switch to turn on the lights, the electrons that power that fixture have literally travelled hundreds of miles across a huge network of wires and transformers. Those electrons move at the speed of light — that’s 671 million miles per hour. Any interruption like a tree limb touching a power line or a faulty piece of equipment can stop that long trip and cause a power outage.

“That’s not so different,” you might say. Lots of the products we consume today come from a long way away. Take the gasoline you pump into your car or truck, for instance. It has also travelled many miles and has required many hours of refining to arrive at your local gas station. But that gasoline made many stops along its trip to be stored in huge tanks, sometimes for days or weeks at a time.

Unlike any other fuel — propane, natural gas, etc. — there is no way to store large amounts of electricity for long periods. There is no “tank” where we can deposit electricity and hold it until it’s needed. So that means that power plants must continuously generate more power than is required, just in case the entire city decides to turn on their air conditioners at the same time.

This can create tremendous challenges for your cooperative and its power supplier, the Tennessee Valley Authority. While an electricity “tank” may not be a reality yet, there are lots of new technologies that allow us to better manage the flow of electricity and understand how to do a better job of delivering it to you at the lowest possible cost. These types of improvements, often referred to as the “smart grid,” are changing the way our industry performs its crucial task. I made the analogy to a friend recently that the electricity industry has known for many years how to win a NASCAR race driving a 1950s Studabaker, but it is now time to get a new ride.

And it is these types of technologies that very well may change the way we consume our electricity. Instead of not knowing how much we are using and what the price is, we will soon be able to make better-informed decisions about how we use electricity and what it will cost us. And that is an improvement that benefits us all.

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